The Council of State has urged banks who could not meet the Bank of Ghana's Minimum capital requirements to form mergers in order to compete favourable and ensure sanity in the banking sector.

This follows a petition by the indigenous banks to the President which was copied to the Council of State.

The Council of State was subsequently briefed by the BOG on the position of the Central bank regarding the challenges affecting the operations of the indigenous banks and measures adopted to address them.

After a meeting between the Council of State and Gorvenor of the Bank in an attempt to settle what seems to an impasse between Central Bank and Local banks over minimum capital requirements, the Council also urged the Central bank to intensify its due diligence, monitoring and enforcement processes to safeguard the interest of depositors.

It asked the BOG to broaden its avenue for public engagement.

The Bank of Ghana last year increased the minimum capital requirement for commercial Banks to ¢400 million from ¢120 million.

The banks have up December this year to fully meet the new capital requirement.

The increase of 233 percent over the old capital level is the biggest capital increase witnessed over the banking landscape.

Five banks according to the Governor of the Central Bank have met the new minimum capital requirement of ¢400 million even before the deadline.